Newcastle Power Project

Gas-fired power station in Newcastle.

A 250 MW power station in Newcastle NSW (Tomago)

The proposed gas-fired power station in Tomago, NSW in the Newcastle region is consistent with our move to a renewable energy mix. Peaking gas power, like the proposed quick-start gas generation plant at Tomago, can be turned on during peak demand periods or whenever renewables aren't available.

Location

The proposed power station will be located between Old Punt Road and the Pacific Highway, a site close to our existing Newcastle Gas Storage Facility and previously permitted for a power station. The site is within the Port Stephens council area.

Latest news

AGL is targeting to have this power station operational by the end of 2022.

The State Government declared the project as Critical State Significant Infrastructure in December 2018. AGL has also submitted its Preliminary Environmental Assessment of the proposal to the NSW Department of Planning and Environment.

AGL has engaged with both Port Stephens Council and Newcastle City Council as well as other key stakeholders such as the Community Dialogue Group for the Newcastle Gas Storage Facility, Tomago Aluminium Corporation, Newcastle Airport, local community groups, environmental groups and the Worimi Local Aboriginal Land Council and Aboriginal stakeholder group(s). We will continue working with these stakeholders throughout the planning, construction and operation phases of this project.

In April 2018, we announced an estimated $400 million investment to develop a ~250 MW gas-fired power station in the Newcastle region close to our existing Newcastle Gas Storage Facility in Tomago, New South Wales.

The power station will comprise either reciprocating engines and/or gas turbines, fast start operation with the primary role of providing firming capacity to the energy market. The station will have duel-fuel capability, using both natural gas and diesel fuel as back up. The station will also be capable of operating at full capacity within five minutes, providing a rapid response to changes in renewable generation supply.

Construction of the power station is expected to begin at the end of 2020 and achieve full operation by the end of 2022.

The power station in Newcastle is part of AGL’s plan to replace generation when Liddell Coal Fired Power Station is retired. The plan proposes a mix of high-efficiency gas power stations, renewables, battery storage and demand response, coupled with an efficiency upgrade at Bayswater Power Station and conversion of generators at Liddell into synchronous condensers. The feasibility of a pumped hydro project in the Hunter region is being explored with the NSW Government.

AGL is progressing with this project to demonstrate our long-standing commitment to our NSW customers. As Australia’s electricity market adapts to a carbon-constrained future, we’re focused on our contribution to creating a secure energy system as the market transitions.

We will continue our commitment to improving reliability and security of supply in NSW using modern, responsive technology that is more fuel efficient and less carbon intensive than the pre-existing plant.

FAQs

Why is AGL building a new power station in NSW?

As coal-fired power stations close, gas-fired power stations will provide flexible, fast-start generation capable of delivering rapidly dispatchable peaking and firming capacity into the National Electricity Market. Fast start dispatchable generation complements renewables by providing back-up to wind and solar energy and can help respond to peak demand.

The gas-fired power station can help improve the security of electricity supply. The proposed location of the station is close to high electricity demand industry in the Newcastle region. The power station will modernise the NSW generation fleet and lower carbon intensity.

How does the new technology work?

There are two technologies that are typically used for the type of flexible, fast start operation that the energy market needs right now. These are reciprocating gas engines and aeroderivative gas turbines. AGL is currently assessing the best technology for both the proposed service and the location at Tomago.

Gas Turbine Technology

With its heritage in the airline industry, aeroderivative gas turbine units consist of a compressor, combustion chamber, turbine and generator. Air is compressed to high pressure before being admitted into the combustion chamber. Fuel (natural gas or diesel as required) is injected into the combustion chamber where combustion occurs at very high temperatures and the gases expand. The resulting mixture of hot gas is admitted into the turbine causing the turbine to turn, generating power. In the open cycle configuration, hot exhaust gas is vented directly to the atmosphere through an exhaust stack, without heat recovery.

Reciprocating Engine Technology

With its heritage in the shipping industry and a form of internal combustion engine, reciprocating engines used for power generation harness the controlled ignition of gas and/or diesel to drive a piston within a cylinder. A number of pistons move sequentially to rotate a crank shaft which turns the generator.

To ensure operational flexibility, particularly at times of high demand, engines will be capable of firing both natural gas and distillate fuel. Natural gas will be the predominant fuel. Duel fuel gas engines have the ability to use liquid fuel as a backup when gas supply is constrained.

How much will it cost to build the power station?

We will invest up to $400 million in the construction.

How many jobs will be created by the project?

We estimate 150-200 new jobs will be created during construction over 18 months, with more employment opportunities expected through the local supply chain.

How will building the power station affect electricity prices?

The market has gone through significant changes due to multiple factors.

In particular, the sudden exit of coal-fired power stations has created a tighter supply and demand balance. There is also the increase in the cost of gas due to material changes in gas demand for domestic and international markets. This project demonstrates our support for an orderly transition to a carbon-constrained future. This investment is to avoid the price spikes the market saw with the unanticipated and sudden exit of Northern and Hazelwood power stations. We believe that increasing supply of generation into the market will ultimately put downward pressure on prices.

We always encourage customers to shop around for the best deal. To compare energy deals, customers can visit the Australian government website, Energy Made Easy.

Environmental impact

The power station will be located in Tomago NSW, in the Newcastle region, an industrial area and home to other heavy industrial operations like AGL’s existing Newcastle Gas Storage Facility (NGSF). We will endeavor to minimise visual impacts of the station.

AGL will assess the noise emissions during its impact assessment process and operate within the requirements of any limits of its government approvals.

AGL will commission surveys to assess what flora or fauna is present in the project area and will develop management measures in accordance with our government approvals to ensure our activities can co-exist with species in the area.

AGL will complete a detailed traffic management plan, in order to manage impacts on the community both during construction and operation.

We believe there to be adequate water supply available for the project.

AGL is committed to monitoring and minimising the effects on air quality of our project. We are committed to an air quality monitoring in accordance with our government approvals.